On the day before that race, there will be a very different race being run in Mexico City. This will be the pre-US election meeting of finance ministers and central bank governors deciding how fast to keep their printing presses running.
The Mexican President Felipe Calderon says, “If I had to sum up the mood, the attitude that prevailed would be that the Europeans, and we supporting them, want more Europe, not less Europe. More integration, not less integration. More collaboration, not less collaboration.”
Madame Christine Lagarde, the IMF leader, says, “There has to be parallel track of addressing immediate issues and providing adequate crisis management tools to deal with issues, while at the same time identifying very clearly what is needed for the long term, as well as the political collective determination to do so.”
“It doesn’t matter if it takes a long time, it has got to be done well, but the two have to operate in parallel: the crisis management tools and the indication now by what the collective political determination is in order to build this better union that many Europeans want.”
As the world awaits news of Obama’s second coming and the extent of a rate cut from the RBA, smart companies should celebrate the end of the gloom with their sales and service team and plan for a happy Christmas and a prosperous new year.
In the United States, business confidence improved to 51.7% in October 2012 from 51.5% in September 2012, according to the Institute of Supply Management (ISM). [Historically, from 1948 until 2012, the United States Business Confidence averaged 52.8, reaching an all-time high of 77.5 in July of 1950 and a record low of 29.4 in May of 1980.]
In Australia, consumers are still indicating above average levels of confidence that things will be OK with those supporting Joe Hockey adopting a downward slope to their projections and those supporting Wayne Swan preferring to believe that he will still get his wafer-thin surplus. Gary Morgan says that respondents indicate “Over the next five years (34%, down 2%) of Australians expect Australia’s economy to have ‘good times’ economically while 22% (up 2%) expect ‘bad times”.
We are likely to see a return of retail investors into the equities market and even a significant investment in innovation in the manufacturing, education and health services industries. Let’s assume that not only does Barack get back but that the Democrats win significant Senate seats.
Let’s further assume that Fed Reserve chairman Bernanke will keep pumping liquidity into the US economy and the European bank fix is put in play by Angela Merkel, who says of the G20 gatherings: “It is obvious that we have problems in the euro zone, and that it is necessary to act … but the important thing is … that we (the Europeans) have made clear that we are determined to act.”
The Association of Chartered Certified Accountants (ACCA), the global body for professional accountants, reports two key mechanisms have the potential to drive sustainable growth.
The first mechanism is the expectation that new, growth-oriented young businesses will create markets and drive the global economy back into expansion.
The second is the realisation that growth will not come from European markets, but rather, from the highly entrepreneurial emerging markets where there is real evidence of growth in domestic demand for Western products and services, and a growing innovative culture that thrives on new challenges.
Both of our political majors now appreciate that austerity measures are needed to carve out space for small business growth and entrepreneurial ventures. Everyone now accepts that “it’s job creation, stupid” is the new political mantra and that means working out how to increase labour market flexibility for smart companies, cut payroll taxes and find ways to increase labour market participation rates.
Forget about the gloom and doom, the declining home sales and retail margins and constant talk of the golden days of the Howard era when the boats had stopped.
Dr Colin Benjamin is an entrepreneurship and strategic thinking consultant at Marshall Place Associates, which offers a range of strategic thinking tools that open up a universe of new possibilities for individuals and organisations committed to applying the processes of innovation, creativity and entrepreneurship. Colin is also a member of the global Association of Professional Futurists.